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Incedius420 Post time: 2015-10-23 20:57
A currency manipulator would be a country that has a set no-float exchange rate or peg's their curre ...
Japan is the third largest by measure of GDP and also a top three or four exporter globally. When the GNI is taken into account Japan is even larger.
Abe did claim that despite their ability and effort they couldn't compete. But this doesn't seem to be the truth. There are about 190 nations and if Japan is a top three both by measures of GDP and exports, how can it claim that its abilities and efforts were stunted by over-valuation of currency?
In terms of white goods, Japan is not exceptionally ahead of both Korea and China or Germany and England in Europe. In terms of industrial machinery and heavy machinery, those from Germany are far more superior than what Japan can produce and today, China's and India's machinery with the exception of the 3% or so high end ones, are more than good substitutes for Japan's.
In transportation, China's trains, Canada's and Germany's all more than match Japan's qualitatively. Cars, You have good marques from US, England and Germany.
Its quite evident that qualitative competition has become quite keen and Japan is losing ground.
By measure of reserves, Japan easily can pay for more than 12 months imports and this has been well sustained fluctuating only marginally up and down along that parameter. In short the position isn't detrimental to Japan.
Hence there is no reason why Japan is not manipulating its currency.
When one compares the Japanese Yen to the Chinese RMB, given that the former moved down against the USD by more than 50% while the latter moved up against the same by about 25%, the correlation is that Yen is depreciated by more than 75% against the RMB. In view that Japan and China No. 3 and No.2 economy respectively) are competing largely on the same products, it follows then that Japan is depreciating its currency to compete against its closest economic competitor. US should not refrain from naming Japan as a currency manipulator just because Japan is considering joining the TPP and is not competing directly against the US. As long as it can be shown that Japan depreciated its currency to compete with a near economic contender/competitor Japan is manipulating its currency. Technicals should not override economic truths.
How IMF could include Yen but not the RMB when such clear blatant currency acts are done baffles the entire world. Are the IMF or the US-Treasury fair measures for the world? One would not think so.